I.O.U.

How we used to treat debtors.

In the early republic, traders could declare bankruptcy while other debtors were jailed.

Illustration by Zohar Lazar

John Pintard, a man of steady habits, made profitable use of his year in debtors’ prison. Locked up beginning in 1797 in a two-story stone jail in Newark that loomed, like a tombstone, over the town’s burial ground, he walked more than a thousand miles—113,984 lengths of the hall—and read more than a hundred books, from “The National Debt Productive of National Prosperity” to the complete works of Samuel Johnson, including Johnson’s Dictionary, which he digested at a rate of one page every nine minutes, which meant that, between the time he spent pacing like a caged animal and the hours he whiled away drafting letters to his creditors, begging them to forgive his debts, it took him a hundred and fifty-seven days to get from “abacus” to “zootomy.” Reading the Dictionary was a way to mark time, like making hash marks on the wall of a cell with a lump of coal. But it went beyond that. “I am more indebted to him than any other writer,” Pintard wrote of Johnson, aptly. Johnson himself had spent time in debtors’ prison—twice, once for a debt of five pounds—and had pointed out the senselessness of it. “We have now imprisoned one generation of debtors after another,” Johnson observed in 1758, “but we do not find that their numbers lessen.”

What’s to be done with people who can’t pay what they owe? Throwing them into prison seems preposterous now; it seemed preposterous then, too. What’s the point, if a man has already handed over to his creditors everything he owns? asked the author of “The Ill Policy and Inhumanity of Imprisoning Insolvent Debtors,” printed in Rhode Island in 1754. “Can his Creditors, with all their Wisdom, have more than All? Will his Imprisonment increase his Estate? Will his Confinement pay or diminish his Debts? or the Punishment of his Body be any Kind of Advantage to them, or to Society?”

It isn’t hard to make the argument against debtors’ prison. But it took more than an argument to abolish the institution, mainly because it was so horrible that it worked, at least as a threat: few things motivate prompt repayment of money owed better than the prospect of a dark, dank dungeon where rats and smallpox thrive while men and women shrink and shrivel and starve and die. (Jailers provided food, bedding, and fuel for felons; debtors were left to fend for themselves.) Parliament didn’t ban the imprisonment of debtors until 1869. The practice ended much sooner in the United States. Imprisonment for debt was abolished in New York in 1831; the rest of the country soon followed.

What replaced it, as Harvard Law School’s Bruce Mann reported in “Republic of Debtors,” a landmark study of eighteenth-century financial failure, was something that has become a mainstay of American life: bankruptcy. Under the terms of the first U.S. bankruptcy law, passed in 1800, Pintard’s debts were discharged, his ledger erased, and his past, eventually, forgotten. Other countries have bankruptcy laws, too, of course, but they generally favor creditors; our laws favor debtors, and always have.

We have been bailing ourselves out, in other words, from the beginning. Lately, we’ve been bailing fast and furious, but not as fast as the water’s been rising. Eighty-six hundred Americans filed for bankruptcy in 1946; 191,729 in 1967; and 314,886 in 1980. An even steeper increase in the number of bankrupts since then is usually attributed to relaxed provisions of the 1978 Bankruptcy Code; non-business bankruptcy filings first topped a million in 1996. The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act made it harder to declare bankruptcy by introducing means testing. In the spike just before that law’s implementation, the number of bankruptcy filings passed two million; the following year, in its aftermath, the number dropped to six hundred thousand, but it’s been creeping back up ever since. There were more than a million filings in 2008. Put another way: in 1946, one in seventeen thousand Americans declared bankruptcy; last year, one in three hundred did. This past November saw 5,075 bankruptcy filings daily, a thirty-seven-per-cent increase over the same month the year before. In 2009, about one and a half million filings are expected, although if Congress makes it easier for homeowners who file for bankruptcy to avoid foreclosure, that number could climb even higher.

We have discharged one generation of debtors after another, but we do not find that their numbers lessen. We find only that we forget, when times are good, that times were ever bad. The colonies were settled, the nation founded, the country built, by debtors. We’ve forgotten that, too; debtors don’t like to look back. “The present generation is bankrupt of principles and hope, as of property,” Ralph Waldo Emerson once wrote. Mostly, though, we’re bankrupt of history.

The state has arbitrated insolvency since antiquity. Under Roman law, the body of a debtor could be cut up and disbursed to his creditors. That probably never happened, but it was common for debtors to end up as slaves. (Debt and slavery, historically—and conceptually—are always tangled up together.) In England, statutes decreeing imprisonment for debt date to the thirteenth century. The point wasn’t to lock you up—as the proverb had it, “A prison pays no debts”—but to terrify you into paying, to avoid incarceration. Nine times out of ten, that’s just what happened, which is why the practice prevailed in most parts of the early modern world and, in the seventeenth century, travelled, with English common law, to America. A 1641 Massachusetts law known as the “Body of Liberties” closely followed English practice, declaring of the insolvent that “his person may be arrested and imprisoned where he shall be kept at his owne charge, not the platife’s till satisfaction be made.” The logic behind this bring-your-own-mutton-and-peat clause was that you might be hiding your money and, if you weren’t, and were truly broke, your friends and family would pony up to keep you in food and firewood or, better still, to pay your debts. There were no terms: you weren’t sentenced for a month, a year, a decade; you stayed in jail until your creditors were satisfied.

This didn’t work that well in the New World. As many as two out of every three Europeans who came to the colonies were debtors on arrival: they paid for their passage by becoming indentured servants. Early on, labor was so scarce that colonists who fell into debt once they got here paid with work; there was much to be done, and there weren’t many prisons. In 1674, a Massachusetts court ordered Joseph Armitage, who owed John Ruck twenty-two pounds, to serve as Ruck’s servant for seven years. (What relieved the colonies’ labor scarcity and spelled the end of debtor servitude was the rise of the African slave trade.) The colonies were also a good place to go to run away from your debts. Some colonies were, basically, debtors’ asylums. In 1642, Virginia, eager to lure settlers, promised five years’ protection from any debts contracted in the Old World. North Carolina did the same in 1669. Creditors, in any case, found it all but impossible to pursue fugitive debtors across the Atlantic. (Not for nothing did Defoe’s Moll Flanders, born in London’s Newgate Prison, sail to Virginia.) Then, there was an early version of a farm subsidy: Connecticut and Maryland forbade the prosecution of debtors between May and October and released prisoners to plant and harvest on the unassailable argument that “the Porest Sort of the Inhabitants” were often “undone in that they cannot be at Liberty to make their Cropps.”

Nevertheless, before long jails were built, and American creditors proved keen to seize their debtors, as was demonstrated in pathbreaking research conducted by the archivist G. Philip Bauer in the nineteen-thirties. As early as 1678, one colonist observed, “It is every dayes way in every trading towne, for merchants upon neglect of payment, for to arrest theire debtors.” Debt became both more common and more complicated. As the colonial economy grew and, like England’s, commercialized, it increasingly depended on pieces of paper that fluctuated in value. This arrangement was especially treacherous on this side of the ocean, where there was never much cash and funds had to travel for miles. At first, only merchants relied on paper credit, not so much currency as notes of hand, bills of exchange, and I.O.U.s. (The term “I.O.U.” dates to the sixteen-teens.) Soon, though, tradesmen and artisans and even people of decidedly modest means were using paper credit. Debt might be a crime and, worse, a sin, Cotton Mather preached in a 1716 sermon titled “Fair Dealing Between Debtor and Creditor,” but if the colonists, cash poor and on the edge of the world, couldn’t live with it they certainly couldn’t live without it: “Yea, without some Debt, there could be no Trade carried on.” Some debt, yeah. The question was, and remains: how much is too much?

In London, debtors’ prisons filled. And then they teemed. In 1728, James Oglethorpe, a member of Parliament, learned that a friend of his had died in Fleet Prison. Oglethorpe urged an investigation, which led to legislative reform outlawing the imprisonment of debtors who owed very small sums. That resulted in the release of as many as ten thousand debtors. Oglethorpe had another idea: what about just shipping the miserable wretches across the ocean? In 1732, he founded Georgia, a colony intended as a refuge for debtors released from English prisons.

This only strengthened a prevailing perception: that the colonies’ relationship with England was that of a debtor to a creditor. By the seventeen-sixties, sympathy for debtors had attached itself to the patriot cause. Weren’t all Americans debtors? Whenever New York’s Sons of Liberty held a banquet, they made a show of sending the leftovers to the city’s imprisoned debtors. Virginia planters like Jefferson and Washington were monstrously in debt to merchants in London. A creditor was “lord of another man’s purse”; hadn’t the British swindled Americans out of their purses, their independence, their manhood? This, anyway, is how many colonists came to view their economic dependence on Britain. Declaring independence was a way of cancelling those debts. The American Revolution, some historians have argued, was itself a form of debt relief.

In 1776, just a few months before the Declaration of Independence, Philadelphians formed the Society for Assisting Distressed Prisoners, modelled on a London society founded in 1773 by a goldsmith who, having amassed a fortune, used it to buy twenty-five thousand petty debtors out of prison, one by one. In 1787, just before the Constitution was drafted, New Yorkers, following the example of a British reformer who had issued a dire report on the state of prisons in England and Wales, formed the Society for the Relief of Distressed Debtors. The group launched an investigation and found that, of 1,162 debtors committed to debtors’ prison in New York City in 1787 and 1788, 716 owed less than twenty shillings.

Debtors in New York used to be locked up in the garret of City Hall, at the corner of Wall Street, in a cramped nook under the eaves. From its dormers, they would lower shoes, tied to a string, to collect alms from passersby. (Debtors’ prisons in other cities and towns had what were called “beggars’ grates,” iron bars through which prisoners in cellar dungeons could extend outstretched palms.) In 1759, New York’s debtors were moved to the New Gaol, near the Commons, or what is now City Hall Park. After 1775, when the city’s criminals were relocated, the debtors had the New Gaol, such as it was, to themselves. Three floors, fourteen rooms: merchants, artisans, and the like shared rooms on the second and third floors; laborers lodged on the first.

In the seventeen-eighties, the painter Ralph Earl must have occupied rooms upstairs, where he had light enough to paint, because the members of the Society for the Relief of Distressed Debtors came up with an ingenious plan to save him: they hired him to paint their portraits. (Artists and writers, like brokers, were in the business of producing paper whose value tended to fluctuate; this made them especially prone to debt. Hogarth, another jailbird, made debtors’ prison a stop on the “Rake’s Progress,” and so many writers—including Defoe, Fielding, and Smollett—landed in debtors’ prison that scholars have argued that debt fuels the plot of nearly every eighteenth-century novel.) But, while Earl worked in a sun-bathed upper-floor apartment, the city’s poorest debtors sat in darkness, day and night. They had no rooms; they slept on the floor in the ground-floor hall or were shut up in the cellar.

New York’s debtors’ prison was a ship of misery in a sea of anarchy. In 1794, as Bruce Mann relates, debtors on the top two floors of the New Gaol, known as the Upper Hall and the Middle Hall, printed their own newspapers, drafted their own constitution, established their own courts, and elected their own sheriffs to enforce the laws. One debtor’s wife was fined for “not cleaning herself and becoming lousey.” (Wives, and children, too, often lived in prison, but almost all jailed debtors were men; in most states, married women could neither own property nor contract debts.) Debtors who couldn’t pay their fines were sentenced to “close confinement.”

John Pintard ended up in debtors’ prison in Newark only because he was trying so desperately to stay out of debtors’ prison in New York. Pintard knew a fair bit about the deprivation of incarceration in Gotham. During the Revolution, he had served on a commission to relieve the distress of Americans being held in the city as prisoners of war, many of whom were starving to death. After the war, he opened offices at 12 Wall Street and became one of the city’s most prosperous importers, specializing in the China and Indies trades. In 1790, Pintard was elected to the New York State Legislature. In his spare time, he helped found the American Museum, “to perpetuate the Memorial of national events and history,” and he contributed a column called “American Chronology” to New York Magazine. He opened a stockbroker’s office and, in 1791, became a partner of Leonard Bleecker (who happened to be the secretary of the Society for the Relief of Distressed Debtors); they were America’s first securities brokers. They got very rich very fast. One New Yorker, in a poem titled “Speculation,” asked, “What magic this among the people, / That swells a may-pole to a steeple?” Then Pintard, who supported Alexander Hamilton’s plan to fund the national debt, partnered with former Assistant Secretary of the Treasury William Duer, who was attempting, unethically but not, at that point, illegally, to corner the market on stock in the Bank of the United States.

Duer was a Madoffian swindler; Pintard fell for him. To fund Duer’s scheme, Pintard borrowed the money of “shopkeepers, widows, orphans, Butchers, Carmen, Gardners” and signed his name to nearly a million dollars’ worth of bank notes, on Duer’s behalf. In 1792, when Duer’s scheme collapsed—all those bank notes were worthless—Duer was all but chased to New Gaol; stone-throwing mobs rioted outside. (One irate investor broke into the jail and challenged Duer to a duel.) Pintard hid out in his Manhattan town house. The practice was known as “keeping house”: if you never left your house, you couldn’t be served with a writ, and you could avoid debtors’ prison. (Fielding wrote “Joseph Andrews,” yet another novel plotted by debt, while keeping house in Charing Cross.) Keeping house was easier if you were also out of town. One friend thought that Pintard ought “to remove to a State where there is a Bankrupt Act.” Pintard turned over everything he owned—his ships, their cargoes; his houses, their libraries—and fled to New Jersey.

The insolvency of Duer and Pintard triggered the Panic of 1792, the nation’s first stock-market crash. Jefferson estimated the losses at about five million dollars, roughly the value of New York; it was as bad, he thought, as if the city had been levelled. Recovery came quickly (Hamilton believed that Duer’s incarceration had stabilized the situation), but the panic left a legacy: it spurred Wall Street brokers to sign an agreement banning private bidding on stocks, so that no one, ever again, could do what Duer had done. That agreement marks the founding of what became the New York Stock Exchange.

John Pintard was no ordinary debtor. Ordinary debtors were indigent, not just insolvent. Then, as now, it was better to be rich and owe a fortune than to be poor and owe a pittance. Pintard kept house in New Jersey for five years before his creditors caught up with him. When he got to debtors’ prison, in July of 1797, he decorated: “The necessary repairs of the apartment allotted to me in this abode of human wretchedness has so engrossed my attention that I have not looked into a book scarcely the last week,” he complained in his diary. He painted, wallpapered, and returned to his books. In April, five days after Pintard finished reading Johnson’s Dictionary, forty debtors imprisoned in New Gaol staged a jailbreak. The week that all but seven of those fugitives were caught, Pintard moved on to reading “Thoughts in Prison,” poems written from Newgate in 1777 by an English clergyman named William Dodd, who was awaiting execution for having forged a bill of exchange in order to bail himself out of debt: “What man, / How high soe’er he builds his earthly nest, / Can claim security from fortune’s change?”

Pintard liked those lines, but he had his own ideas about misfortune: unrelieved debt was un-American. That summer, when Pintard and his fellow-inmates celebrated the Fourth of July, they toasted the United States: “May its next revolution no longer find imprisonment for debt & personal slavery, solecisms, in the chapter of American rights & privileges.” And then Pintard, who, after Johnson, had been reading Shakespeare, offered a debtors’ “Henry V”:

We few, we wretched few, we band of brothers,

For he to day that is confined with us

Shall be our brother, be he ne’er so vile.

The Constitution grants to Congress the power “to establish . . . uniform Laws on the subject of Bankruptcies.” What the framers did not make clear, and what led to decades of debate, was whom those laws were for. Bankruptcy for some, or bankruptcy for all? There seemed to be two kinds of debt: debts incurred by “traders” (stockbrokers, bankers, merchants) and debts incurred by everyone else. The first kind could be forgiven, for the sake of commerce; the second kind had to be enforced, for the sake of creditors, contracts, and public morality. Traders take on financial risks, and society benefits; for commerce to thrive, a trader’s liability has to have a bottom.

The idea that debt is necessary for trade, and has to be forgiven, is consequent to the rise of a market economy. The idea that debt is wrong and should be punished is a feature of a moral economy. Historians generally argue that the market economy replaced the moral economy sometime between 1700 and 1900. Of course, it’s a lot messier than that, or talk-show hosts wouldn’t be calling for A.I.G. executives to be air-dropped onto Alcatraz. Bankruptcy protection and debtors’ prison do fall, roughly, on either side of a chronological divide, between a market economy and a moral one. But there remains an American exception. The bankruptcy laws we inherited from England granted relief only to traders. Americans, though, came to prefer forgiving everyone’s debts, on the ground that sorting debtors into two systems (bankruptcy for wheelers and dealers, debtors’ prison for chumps) is, finally, undemocratic.

Americans fought to provide the same debt relief for everyone because we believe in equality, and because bankruptcy protection makes taking risks less risky. Americans, Tocqueville wrote, “make a virtue of commercial temerity.” We like risk. “Hence arises the strange indulgence which is shown to bankrupts.” Our willingness to forgive—and forget—debt lies behind a good part of our prosperity. But in this topsy-turvy year we’ve so wholly forgotten where we began that we’ve turned our history upside down. Just now, lots of Americans would like nothing better than to put the wheelers and dealers in jail and to wipe away the debts of the rest of us. (Jail for criminals is one thing, but the populist fury has mostly been directed at people who haven’t broken any laws. That raises the question of whether we needed better laws. We did.) Some Americans want traders to pay for the risks we all took, as if traders sinned but we were merely investing. The argument, in short, is for sorting: Wall Street becomes a debtors’ prison; Main Street declares bankruptcy. It might even come to that. But it might also be worth remembering why we stopped sorting, and when.

In 1788, delegates to the New York ratifying convention proposed an amendment to the Constitution: bankruptcy laws passed by Congress “shall only extend to merchants and other traders,” but states should have the power to “pass laws for the relief of other insolvent debtors.” The amendment didn’t pass. States, nevertheless, did adopt those laws. An insolvency law passed in New Jersey in 1798 was meant to save poor debtors from starvation by requiring a creditor to pay four shillings a week for his debtor’s keep. When John Pintard’s creditor missed a payment, Pintard—whose prison syllabus included law books—seized upon this technicality. That helped get him out of jail, in August of 1798. There remained, however, the matter of discharging his debts. When Congress passed the first federal bankruptcy act, in 1800, it followed English precedent, and applied only to traders. Pintard moved to New York and took out an ad in the newspaper, announcing that he was doing business as a broker. He then traded a single stock, at a profit of fifty-eight cents (which he donated to charity), and promptly filed for bankruptcy. On September 10, 1800, seven days before his bankruptcy was finally declared, he wrote in his diary, “Should prosperity smile, let me never forget the suffering I have endured to serve as a check against presumptuous hopes.”

Pintard didn’t forget, but everyone else did. In 1935, Charles Warren, the first historian to make a careful study of bankruptcy, found that every major American bankruptcy law had been the product of a financial crisis or a depression—and was subsequently repealed or watered down when the economy revived. As one nineteenth-century congressman explained, creditors, who outnumber debtors, tend to get the upper hand: “There are 500,000 bankrupts, but how many creditors? Five at least to each debtor—hence there will be 2,500,000 for repeal.” Bankruptcy law also goes in cycles (The Dow is down: We need relief!), because the economy goes in cycles (No, wait! The Dow is up!). The faster our news, the shallower our history, the more frantic our panic.

The 1800 law that discharged Pintard’s debts was passed to help the country recover from the Panic of 1792; it was repealed in 1803. The House committee on repeal concluded that it promoted “fraud, speculation, and extravagance.” And that it helped those who least needed it: “We saw rich men today, bankrupt tomorrow, and next day in full business and great style, while the poor farmer or manufacturer who had been ruined by their extravagance must suffer the penalties of the law in a jail.”

Pintard was never again a rich man, but in 1804 he was appointed New York City’s first Inspector—in effect, the city’s statistician. He counted things, especially things having to do with public health: taverns, streets, people, cellars, births, deaths, firemen, dog licenses. And then he did something he’d been wanting to do for a long time: in 1804, he founded the New-York Historical Society. His books formed the core of the Society’s library; Pintard became its librarian. Dedicated to “the humble task of collecting and preserving,” he begged New Yorkers for donations of papers—letters, books, tracts, magazines, anything. He wanted to save the nation’s past.

Two years after Pintard became Inspector, the Society for the Relief of Distressed Debtors, which had changed its name to the Humane Society, ladled out to debtors nine thousand quarts of soup. The number of debtors in New York, like just about everything else, was growing wildly. (Between 1790 and 1830, the city’s population increased by more than five hundred per cent.) In 1811, a New York lawyer named Joseph Dewey Fay, using a pseudonym that recalled an English reformer, published “Essays of Howard; or, Tales of the Prison.” Fay, who claimed to have spent sixteen years in debtors’ prison, estimated that in 1810 ten per cent of New York’s free men had been arrested for debt. “Americans boast they have done away with torture,” Fay wrote, “but the debtors’ prison is torture.” He went to Albany and lobbied the legislature to pass an expanded insolvency law for imprisoned debtors. He prevailed. The day the bill became law, Fay advertised his legal services in the newspaper—who better to help you clear your debts than Joseph Fay, Esq.? Six hundred and twenty-five debtors availed themselves of discharge in the law’s first ten months. People had themselves arrested for debt merely to take advantage of it.

A response to the Panic of 1809, that law was repealed within a year, and was later ruled unconstitutional by the Supreme Court, which took it to encroach on Congress’s authority. Opposition to extending bankruptcy protection was overcome only in the wake of the Panic of 1837. In 1841, Congress passed a sweeping federal bankruptcy law that offered protection to everyone. Within two years, forty-one thousand Americans had sought relief. Henry Anstice, who kept a shop on Nassau Street, printed a directory of every New York bankrupt: carpet dealers, grocers, stove-makers, merchants, clerks, dentists, tinworkers, even a towboat captain. By 1843, when Anstice printed his list, the economy had improved and, predictably, the law had been repealed. But bankruptcy protection would never again be restricted to brokers. It would be for everyone.

Americans like to get rich fast. That this means we go broke fast, too, is something that we have become very good at forgetting. Our ignorance of history is matched only by our unfailing optimism; it’s actually part of our optimism. Pintard’s optimism was different: he was hopeful that we wouldn’t forget to be pessimistic. Should prosperity smile, let me never forget the suffering I have endured to serve as a check against presumptuous hopes.

John Pintard took away from prison a sense of civic obligation. “We all owe a debt to Society as well as to God,” he wrote in 1816, “and I wish to discharge my share.” That year, he found a home for the New-York Historical Society: the abandoned almshouse next door to the debtors’ prison. He had become involved in a dozen causes, including the Society for the Prevention of Pauperism, a platform from which he hoped to launch a plan that he had first devised during the Panic of 1809: he wanted to start a savings bank, the first in the nation. “Monday 4 P.M. Committee of the pauperism Society on the subject of a Savings Bank,” Pintard wrote, accounting for a typical week in his life. “Tuesday 4 P.M. Committee of the Historical Society on the Library, on the propriety of establishing a reading room.” A savings bank was, to Pintard, merely another kind of depository.

Pintard helped open that bank, the New York Bank for Savings, during the Panic of 1819. “Americans are an active restless people impatient of slow profits,” he wrote. “Their habits . . . must undergo, not a reformation, but a complete revolution. A new race must arise on the broken fortunes of the present.” That new race had to learn “to plod and earn an honest living, to accumulate by slow degrees.” Americans, Pintard believed, “are like the Indians, who think when Spring comes that there will be no more winter.”

Pintard wasn’t averse to speculation, though. During those same years, he played an important role in bolstering support for the Erie Canal, an extraordinarily risky and enormously capital-intensive public-works project (known, fondly, as the Big Ditch), which spurred manufacturing, created thousands of jobs, and made New York the wealthiest city in the world. The canal, Pintard thought, was “an enterprize second only in importance to this State, to the declaration & achievement of Am. Independence.” When the canal was opened, in 1825, it was Pintard who was charged with carrying a bottle of water from the Erie to pour into the Atlantic.

Meanwhile, debtors’ prison was dying. In 1818, the state of New York required the release of just about anyone who owed less than twenty-five dollars; in 1825, that amount was doubled. Calls for the outright abolition of the institution grew more urgent: debtors’ prison was both un-American and anachronistic. “Debtor imprisonment law is the product of the dark ages of feudalism,” petitioners to the Albany legislature argued. “Why Americans have allowed it to exist here is a wonder.” The wonder, really, is that Americans managed to get rid of it; at the time, debtors were imprisoned in every country in Europe except Portugal.

In 1831, the New York State Legislature abolished imprisonment for debt. Maine and Tennessee followed that same year, as did, slowly but surely, the rest of the Union. The last debtors in the New Gaol left on March 1, 1832. The building, whose twenty-two-inch-thick stone walls made it fireproof, was put to another use: housing the city government’s archives.

William Duer died, a debtors’ prisoner, in 1799. John Pintard went bankrupt and got off nearly scot-free. Given the very many things he did with his fresh start—he served as treasurer of the New York Bank for Savings until 1841, when he was eighty-two, and blind—it’s good that he didn’t die in Newark’s jail, a stone’s throw from the town’s burial ground, a potter’s field.

In the strange indulgence we show to bankrupts, Tocqueville wrote in the eighteen-thirties, “Americans differ, not only from the nations of Europe, but from all the commercial nations of our time.” That’s still true. We left something behind, early on. Nineteenth-century British writers kept on writing gloomy novels with scenes set in debtors’ prisons because they still had those prisons; Dickens’s father lived in debtors’ prison; Thackeray was arrested for debt; and Trollope’s father fled the country to avoid it. American writers coined shiny, bright new plots: rags-to-riches, the hazards of new fortunes. Debtors’ prison was abolished, and bankruptcy law was liberalized, because Americans came to see that most people who fall into debt are victims of the business cycle, and not of fate or divine retribution. Because our bankruptcy laws make taking risks less risky, for everyone, everyone takes more risks. We have lost and we have gained, yet, in the main, we have prospered mightily.

But not endlessly. Spring comes, and summer, and then fall. Winter, too, will come again. It will get chilly, and we won’t remember where we put our coats. Consumer debt, which stands at two and a half trillion dollars, has been the engine of the American economy since the nineteen-seventies and, arguably, longer. Buying on credit has been, for at least the past half century, pitched to the American people as a civic responsibility. We keep buying and spending and overextending and forgiving debts; we keep forgetting how we came to accumulate them; we can’t seem to remember that bad times follow good; we lack the fortitude supplied by a bracing history. There are a thousand bankruptcy lawyers working in Manhattan today. There will be more tomorrow; they peddle pastlessness. But sometimes there’s profit in looking back, and reckoning our accounts.

No one wants to hear that. It’s difficult; it can be depressing. Here’s what everyone wants to hear: the motto that Pintard, before he died, in 1844, decided to put on his family’s coat of arms: Never Despair. ♦

Jill Lepore is a staff writer and a professor of history at Harvard. “The Secret History of Wonder Woman” is her latest book.